Not all Carriers are being hurt by surging fuel prices. Burlington Northern Santa Fe, one of the largest railroad freight carriers in North America, announced that its first quarter net income substantially improved by 30%.

The details show that much of this financial improvement came as a result of the company’s ability to collect an extra $275 million in fuel surcharges from freight shippers who use the railway.

The results show that the rail carrier was, really, benefiting from the rise in fuel prices. Commentators note that companies that engage in freight shipping, LTL, Truckload, or rail, should note that fuel surcharges are not merely “cost pass-throughs”, but may also be profit centers for carriers.

This is because methods of determining fuel surcharges factor in variables other than just the price of fuel.  This means that a small increase in the actual cost of fuel can end up as a significantly greater boost in the “fuel surcharges” tacked on by carriers.

When navigating the pricing maze, freight shippers need to be be sure the freight quote they receive is an all-in price, including any fuel surcharges.  This way, shippers can avoid nasty surprises when the bill comes.

This entry was posted on Tuesday, April 29th, 2008 at 10:10 am and is filed under Freight-World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.